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Higher cigarette tax needed to cut smoking, backers say By MICHAEL A. LINDENBERGER mlindenberger@courier-journal.com The Courier-Journal Saturday, February 14, 2004 Gov. Ernie Fletcher must think bigger if he wants an increase in the cigarette tax to be as good for the state's health as he expects it could be for its budget, health advocates warned yesterday. While smoking opponents said any tax increase is good news, they also said it would take at least a 75-cents-a-pack jump in the price of cigarettes to persuade enough smokers to quit to make a big difference. An increase from the existing 3-cents-a-pack tax to more than 40 cents is not enough, especially in Kentucky, home of the nation's highest smoking rates and second-lowest tax on cigarettes, said Carol Roberts, director of Kentucky ACTION, a Louisville-based anti-smoking lobbying group. "Putting a very low increase does not do that much in terms of public health," Roberts said. "Even more importantly, you are talking about young people not starting the habit. But in order to do that you have to make it a significant increase." In revealing the first specifics of a promised tax-reform plan, Fletcher said this week, "We're going to have to look at a reasonable increase in the cigarette tax. We're bouncing levels from 20 to 40 cents off people and see what they say." He did not say whether that amount would be on top of the existing 3-cent tax. Yesterday, Fletcher's spokeswoman said the governor's proposal is the result of a careful balancing act. "Gov. Fletcher agrees with health groups about smoking cessation however, he's working with all involved to ensure an agreement is reached that health groups, farmers and the General Assembly can all agree upon," said Jeanne Lausche, the governor's press secretary. It is "an agreement that will ensure the cigarette tax is part of an overall tax modernization package," she said. In the 2002-03 fiscal year, the 3-cent tax brought in about $16million, according to the Kentucky Revenue Cabinet. If legislators approve, Kentucky would join 33 other states that have raised taxes on cigarettes since Dec.31, 2001, when state budgets began tightening across the country. Among those states, New Jersey's tax is the highest, at $2.05 a pack, and Tennessee's is lowest, at 20 cents per pack. The federal Centers for Disease Control and Prevention reported earlier this year that Kentucky has the highest adult smoking levels in the nation. A higher percentage of teenagers smoke here than in any other state, according to a 2002 report by the centers. Tobacco growers and cigarette companies oppose the tax increase, arguing that it will hurt the industry but will not reduce smoking. "TAX INCREASES are counterproductive," said Mark Smith, director of public affairs for Brown & Williamson Co., the Louisville-based cigarette manufacturer. "Nobody is going to quit smoking because the price goes up. They will just look to buy their cigarettes somewhere else." In many states with high cigarette taxes, smokers who live near state borders have reacted by buying cigarettes at stores in neighboring states, government and other research shows. But the proposed tax increase in Kentucky would put the state in line with many of its neighbors, and make its tax rate higher than only Tennessee and Virginia, where the tax is 2.5 cents. In Western Kentucky, the state's higher tax would still fall far below Illinois' 98-cent tax. Some smokers said they would likely cut back if they had to pay more. Allen McGimsey, 33, of Elizabethtown, said that he favors the tax increase, and that after 15 years of smoking it might help him reduce his five-packs-a-week habit. McGimsey, a telecommunications network manager, said he believes the tax increase would be fair because smoking costs taxpayers money for health care. Smith said evidence suggests higher taxes on cigarettes do not work. IN THE MONTHS after cigarette taxes were sharply increased in New York City where state and city levies can add $3 to each pack the per-capita smoking rate stayed at about 91 packs a year, he said. Only about 71 packs per capita per year were reported to state and city tax collectors, he said. As prices have increased across the country, smokers have begun buying cigarettes online and often skirting federal and state laws that require the tax to be paid to the state were the buyer lives, he said. "There has been an impact in states where the taxes have been increased, but not the claimed reduction in smoking," Smith said. "That change has been in buying patterns. By raising taxes, you are forcing people to go to the Internet, and the Internet is a bad place to buy cigarettes. "It's bad because they often don't age-verify and they don't pay taxes. That is illegal. They are promoting a policy that is promoting illegal activity." But smoking foes say any increase will stop some from smoking. "The more expensive cigarettes are, the less likely they are to start," said Amy Barkley, a Kentucky field representative for the National Center for Tobacco-Free Kids, a Washington, D.C.-based anti-smoking lobby. Barkley and other lobbyists said research shows that for every 10percent increase in the price of cigarettes, the number of adult smokers goes down 2percent, and teen smoking drops 6percent to 7percent. In Elizabethtown on Thursday, a pack of Marlboros was selling for $2.76. A 40-cent tax increase would produce a roughly 15 percent jump in the price of those cigarettes. Only about half of youth smokers pay for their own cigarettes, according to information provided by the Center for Tobacco-Free Kids. About a third get them for free from friends, and the rest steal them, the report said. IF FLETCHER has decided to raise the cigarette tax, he might as well raise it enough to produce a big decline in smoking, Barkley said. "Support does not start falling off until after you raise it past a dollar," she said. "So if I was a policymaker, I'd say this isn't detrimental to me, so why not go for the higher amount to get the bigger public health benefit. ... It's a win-win-win." Companies like Brown & Williamson are not the only voices in Kentucky that disagree. Michael Ammerman, a tobacco farmer who founded Farmer's Tobacco Co. in Cynthiana four years ago, said any increase will hurt his business, which sells about 480,000 cartons of Kentucky's Best cigarettes a month. "We are definitely against it," he said. "Seems to me they are singling out one segment of society." "They ought to pick on somebody else for a change," said Ammerman, whose company employs 85 workers. "If they want to tax stuff that is unhealthy, I say OK, then tax it all. I don't smoke, and I don't want my kids to smoke. But I eat too much ice cream and too much red meat, and that is not healthy. They ought to be fair about it."

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